6 Tips To Make Referrals Work For Your Small Business

My good friend and tennis partner, Nancy, volleyed over a great question last week: What’s the etiquette of referrals? Great question! So, please allow me to serve up some answers and a few recommendations.1. Never Forget the Power of The Thank You - If you want to grow your business and get word-of-mouth referrals, never forget the “thank you” to those  who have trusted you with a recommended client or customer. Virtually all of us feel under-appreciated, and I have yet to meet someone who feels over-thanked. I remember the brouhaha with NFL player Terrell Owens (TO) who was feeling under-appreciated even though he was making over $22 million a year.2. It Must Be Immediate – Of course, a thank you will work, but it must be immediate. A thank you card, note, email or token is wasted if it occurs more than one week after the referral.3. Forget About the Hallmark Card – Mushy or cute cards are great for your BFF’s birthday, but not in the business world. Here, I recommend a custom-created card or even a simple card with your logo on the front that should be gang printed with your stationery and business cards.4. You Must Have a System - It need not be complicated, but you need a system in place. If you have just hung up with a prospect who was referred to you by a current client, immediately start writing your card and getting it in the mail. I have handmade cards (see mine here)  and $10 gift cards stacked in my drawer ready to go. If your system isn’t turnkey, it will not happen!5. Develop a Ladder of Thanks- In other words, it is certainly appropriate to thank more generously clients who refer you 10 clients per year vs. customers who have only referred you one. At Christmas, Valentine’s Day, or even Thanksgiving, make sure you acknowledge your bigger referrers with bigger gifts.6. Ahhh, The Finder’s Fee – I do not participate in this type of this system because I never want my clients to believe that I have made a referral based upon my remuneration vs. the good of the client.  (I do, however, accept chocolate!). However, if you do participate in this arrangement, I think it muddies the waters. As the FTC is now considering that bloggers should alert readers that they have received compensation for a positive view, it bares considering that your clients should also receive notice that you are receiving compensation (aka “kickback”).A note from The Mogul Mom: If you're looking for thank you cards that can be customized with your company name or logo, contact Shannon Whealy at Turnaround Design. If you're looking for the handmade cards that Liz has, contact Julie Dunsmore at Sew Fab Designs.Now, about Liz's number 6--the finder's fee--I'm not sure I completely agree that offering a finder's fee muddies the waters.  I think it's a way to thank the people who are helping you build your business.  And, if you're a legitimate business person, your reputation is at stake any time you refer someone, whether you're receiving a finder's fee or not.  There's no way I'd ever jeopardize my reputation for any amount of money.The same goes for recommending products and services to your clients  --your reputation is at stake whether you're receiving an affiliate commission or not.  I receive affiliate commissions from some of the products and services that I recommend, but trust me -- the money I receive is not worth risking my reputation, so you can be sure that I only recommend products and services that I've used and have benefited from. And, if at all possible, I try to make any recommendations a "win-win"--I try to find affiliate programs that not only offer commissions to me but also, discounts or bonuses for you (example: I use and love UltraCart Shopping Cart. I receive affiliate commissions from UltraCart and you receive a 60-day trial as opposed to the regular 30-day trial).As Dennis Miller used to say at the end of one of his famous rants, that's just my opinion, I could be wrong.What do you think? Do you have any tips you'd like to share?